Which One of the Following Statements Is Correct Concerning the Differences

question 62

Multiple Choice

Which one of the following statements is correct concerning the differences between preferred and common stock?

• A) Common shareholders have first right of priority after creditors in liquidation.
• B) Preferred shares carry voting rights while common shares do not.
• C) Common shareholders generally have more control over a corporation than preferred shareholders.
• D) Common dividends in arrearage must be paid prior to any additional preferred stock dividends.
• E) Common stock is a form of equity while preferred stock is a form of debt from a legal standpoint.

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